TYPES OF ORGANISATION

Organization is an essential part of human life.  We are born in organisation, and spent most of our lives working for organisations. The term organization is used in three different situations.

          Organization is the formal structure of authority through which work sub-divisions are arranged, defined objective (Luther Gullick)

          An organization is a combination of the necessary human beings, materials, tools, equipment, working space and apparatus brought together in systematic and effective co-ordination to accomplish some desired objectives.

TYPES OF ORGANISATION

Traditional organizations: These are built in a vertical setting providing more for up and own pattern of authority and communications. These organizations are slow to respond to changes in organizational environment. On the other hand projects are characterized by horizontalness providing for direct communication cutting across lines of authority. This structure for projects provide for faster response to external changes. Project organizations incorporate horizontal relations into the formal structure.

Divisional Organization: Here a separate division is set up to implement the projects. The project manager who heads the project is provided with the required personnel over whom the project manager has full line authority. He has total control to co-ordinate the various functions and activities. Divisional project organization facilitate planning and control and integration of efforts by all groups. However this form of Organization has a draw back in the sense that it may  lead to duplication of specialists in a company handling multiple projects. The set up may lead to inefficient use of resources.

Matrix Organization:  A matrix is represented by rows and columns where the line functions or departments are shown in rows and projects in columns. Employees in the organization belong to a row or a line function or department and move to the column when they are required for a project. When the team member’s work is completed in the project the project manager returns the person to the line function.

In a matrix organization the personnel working in the project report to the functional head as well as the project manager. This form of organization involves that the authority is shared between the functional head and the project manager. The authority and the influence of the project manager cuts across traditional vertical line of command. The project manager integrates the activities of personnel from various functional departments towards the realization of project objectives. Matrix organizations facilitate effective utilization of resources. Matrix organizations may also involve inherent conflict situations.

Advantages of matrix organizations

• Well suited for project-oriented companies

• Efficient utilization of Resources specially the human resource

• Specialist services can be shared by several projects avoiding duplication of resources

Disadvantages of Matrix Organizations

• Capable people will be in heavy demand and they may have to work in several projects

• Line managers may become weak

• Dual reporting of personnel to line managers and project managers may lead to problems

• Matrix organizations may involve conflict between line managers and project managers